A Deputy Minister of Finance, Charles Adu Boahen, has disclosed that Ghana was able to raise a $2 billion bond at comparatively lower rates because government marketed the country well to foreign investors.

The government recently raised a total of US$ 2 billion from its 2018 sovereign bond issuance, which was concluded last Thursday [May 10, 2018]; a move described as an indication of strong investor confidence.

The 10-year bond also raised $1.0 billion at 7.627%, while the first 30-year bond raised another $1.0 billion at 8.627%.

Gov’t struggled to raise GHc6 billion in 2017

The Akufo-Addo government struggled to raise GHc6 billion in two separate bonds in 2017 to clear the country’s energy sector debts which as at December 2016 was 2.5 billion dollars.

The government, however, was only able to generate GHc4.6 billion despite extending the deadline for the bond by a week.

Speaking on the Citi Breakfast Show on Monday, Mr Adu Boahen attributed the success of the recent bond on what he described as better promotion of the country.

“We managed to raise money at such lower rate this time around because we actively spent 2017 marketing the country, doing non-deal road shows, talking to investors and really allowing them to see that we are actually running a very legitimate economy.”

He blamed previous struggles on bad publicity and propaganda.

“We need to stop the politics because all these news items go into the media. We need to have a lot of constructive criticism of each other rather than all these negativity because somebody picks up the news and reads it and doesn’t realise that this is just politics.”

He said while at one of the road shows, they were confronted with a question from one of the investors over GNPC’s budget saying “he [the investor] caught me totally off-guard.”

“We were on the roadshow, and there was a question. He said he had received an email and that GNPC had gotten approval to raise GHc500 million to buy fishing boats. Why are we using the money to buy fishing boats and I was like what is he talking about? I was even confused; he caught me totally off-guard. And this was at the launch setting; we had done the presentation. He showed me the news article, and it was in Parliament were one of the opposition members had come out to say that this is what GNPC was going to use the money for and also build a small headquarters or a branch office in Takoradi. People read these things, and because they don’t know the context, they believe it. And all of a sudden it becomes perception and reality,” Adu Boahen narrated.

What would $2 billion bond be used for?

The Deputy Minister said about $820 million of the amount would be used to refinance a 5-year Eurobonds that was issued in 2015, $750 million will go into financing capital projects in the 2018 budget while the remaining $400 “will go into the sinking fund.”